South Korea Plans to Introduce Blockchain-Based Deposit Tokens for Public Expenditure in Q4

As part of its efforts to modernize public fund management, South Korea's Ministry of Economy and Finance is set to launch a pilot program in the fourth quarter, testing the use of blockchain-based deposit tokens for government spending. The project, approved under the 2026 regulatory sandbox program, aims to replace traditional government purchasing cards with tokenized deposits for business promotion expenses. By leveraging token-based payments, which can be programmed with predefined conditions such as spending limits and industry-specific usage, the government expects to improve oversight and reduce the need for manual audits. Additionally, the removal of intermediaries like card networks is anticipated to lower transaction fees for small businesses receiving government payments. Following a successful trial in Sejong City, the ministry plans to expand the program if it demonstrates enhanced control over spending and yields significant cost savings.